Essentials of Marketing, 8th Edition

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Chapter 4 Evaluating Opportunities in
the Changing Marketing Environment
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Chapter 4 Objectives
When you finish this chapter, you should

• 1. Know the variables that shape the environment
  of marketing strategy planning.
• 2. Understand why company objectives are
  important in guiding marketing strategy planning.
• 3. See how the resources of a firm affect the
  search for opportunities.
• 4. Know how the different kinds of competitive
  situations affect strategy planning.

• 5. Understand how the economic and technological
  environment can affect strategy planning.
• 6. Know why you might be sent to prison if you
  ignore the political and legal environment.
• 7. Know about the cultural and social environment
  and key population and income trends that affect
  it.
• 8. Understand how to screen and evaluate
  marketing strategy opportunities.
• 9. Understand the important new terms.

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The Importance of Objectives
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A Hierarchy of Objectives
Exhibit 4-1
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Limits on Opportunity Search
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The Competitive Environment
Kinds of Markets
Competitor Analysis
Key Concepts in the Competitive Environment
Competitive Rivals
Competitive Barriers
Information on Competitors
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The Economic and Technological Environment
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The Impact of Technology

• Technology is the application of science to
  convert and economys resources to output
• Technology impacts marketing both through
  opportunities for new products and new ways
  (processes) for handling marketing functions
• Example consider the Internet
• Products software for computer users
• Process selling from a web site

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The Political and Legal Environment
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Some Important U.S. Federal Regulatory Agencies

• Agencies Responsibilities
• Federal Trade Commission (FTC) Enforces laws and
  develops guidelines regarding unfair business
  practices
• Food and Drug Administration (FDA) Enforces laws
  and develops regulations to prevent
  distribution and sale of hazardous consumer
  products
• Consumer Product Safety Commission Enforces
  Consumer Product Safety Act(CPSC)
• Federal Communications Commission Regulates
  interstate wire, radio, and (FCC) television
• Environmental Protection Agency (EPA) Develops
  and enforces environmental protection
  standards
• Office of Consumer Affairs (OCA) Handles
  consumer complaints

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The Cultural and Social Environment
Example of a Cultural Trend The Changing Roles
of Women
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Identifying Potential Markets
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US Population Trends
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Changes in U.S. Birthrate, 1935-2005
After a peak between 1950 and 1955, U.S.
Birthrates declined steadily until 1975.
Following a brief rise in rates finishing about
1990, rates have again begun to fall.
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Sales and Cost Curves ofTwo Strategies
In this graphic, a too-narrow focus on the
first years results might cause the marketing
manager to abandon this product as too costly.
Exhibit 4-8
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Sales and Cost Curves of Two Strategies
In this graphic, a too-narrow focus on the
first years results might cause the marketing
manager to adopt the product prematurely, since
its performance in year one is misleading.
Exhibit 4-8
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Sales and Cost Curves of Two Strategies
Exhibit 4-8
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Evaluating Opportunities
Exhibit 4-9
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Continuum of Environmental Sensitivity
Basic commodity-type consumer products
Industrial products
Consumer products that are linked
to cultural variables
Exhibit 4-10
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Key Terms
Nationalism NAFTA Consumerism Cultural and Social
Environment Gross National Product
(GNP) Metropolitan Statistical Area Senior
Citizen Strategic Business Unit (SBU)
Mission Statement Competitive Environment Competit
or Analysis Competitive Rivals Competitive
Barriers Economic and Technological
Environment Technology
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